Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 168 - AT - Income TaxExemption under Section 11 - disallowance of claim as the assessee is hit by the proviso to Section 2(15) rws 13(8) - Held that:- We find that there is no change in the facts for the year under consideration as well as it was for the Assessment Year 2009-10. Accordingly, we hold that the provisions of proviso to Section 2(15) of the Act are not applicable in the case of the assessee. Though the assessee has contended that the surplus is arising only from the interest income and other income in the nature of penalty and other charges and not from the activity of acquisition of land and providing the infrastructure facilities for industrial development however, since the authorities below have not examined the issue from the point of the application of income in terms of Section 11 of the Act. Therefore, we direct the Assessing Officer to verify whether the assessee satisfies the provisions of section 11 so far as the application of income is concerned for availing the exemption under Section 11 of the Act. Addition on account of lump-sum lease charges received - Held that:- Assessing Officer did not accept the contention of the assessee and observed that the lease is for a long period which amounts to transfer of the land to the allottee and therefore the entire lump-sum lease rental received by the assessee during the year was considered as revenue receipt of the assessee. It is pertinent to note that the land allotted on lease is not a outright sale giving absolute title and ownership to the allottee. Only when a conveyance deed is executed on payment of unearned premium and until and unless the land is converted into freehold by executing a conveyance deed after payment of unearned premium the allottee gets absolute legal title of ownership of the land. The lease transaction does not give an absolute ownership or title as it can be cancelled and re-entered. Further the assessee has been consistently following the accounting policy of recognizing the lease rental proportionate to the lease period and therefore the consistent accounting method followed by the assessee for a considerable long time cannot be disturbed when there is nothing on record to suggest that the accounting method followed by the assessee resulted avoidance of tax. Accordingly, we set aside the orders of the authorities below qua this issue and delete the additions made by the Assessing Officer. - Decided in favour of assessee Disallowance of depreciation to assessee trust - Held that:- Depreciation is allowable on capital assets on the income of the charitable trust for determining the quantum of funds which have to be applied for the purpose of trusts in terms of section 11 of the Act. See DCIT Vs. Jyothi Charitable Trust [2015 (7) TMI 859 - ITAT BANGALORE] - Decided in favour of assessee
|